Magazine article Management Today

There's a Silver Lining in the Cloud

Magazine article Management Today

There's a Silver Lining in the Cloud

Article excerpt

Cloud computing may sound like just another IT buzzword, but, in fact, says Andrew Greenway, global programme lead for cloud services, Accenture, the cloud offers profound benefits, such as lower IT costs and enhanced communication with customers.

MT: We hear a great deal about cloud computing at the moment, about how more and more of the technology we use in business will be hosted by third parties and delivered on a 'pay-as-you-go' basis. What are the factors behind the popularity of cloud computing?

Andrew Greenway: Why has cloud suddenly taken on such momentum, given that the technologies that underpin it - the internet, virtualisation - have been around for quite a long time now? I think there are three factors. The first is the huge investments being poured in by new players to the corporate IT industry. Amazon, Google and Microsoft, in particular, are investing billions of dollars in hardware and software at a rate that we've not seen before. These firms have realised that they can resell some of that capacity back to the corporate markets and make an additional return on their investment.

The second thing is that there are now products and services being offered on cloud platforms that really do deliver good functionality, good enough not only for small and medium-sized companies but also larger organisations as well.

And the third thing is that we've now got a cadre of business people who have recently left university and who have grown up with the internet They expect to have all the information they want at their fingertips, when they want it and on a range of devices. When they enter the corporate world they find the IT infrastructure looks very dated compared with what they have in their own lives. That's going to put a lot of pressure on IT directors to move into the cloud.

MT: What about the business benefits, what are those likely to be?

AG: Clearly cost is one - trying to get more for less is the name of the game in most industries nowadays, and the cloud can offer considerable cost savings. A typical in-house corporate IT operation might run its servers at only around 10% utilisation. If they've done a really good job of virtualisation and automation then they might push that up to 30%-35%. But you might be able to get that up to 80%-90% by, for example, taking the peaks of demand away from your own servers and running them in the cloud.

Then you really can start to make some considerable savings, although for most organisations this is not going to happen overnight. They have legacy investments and they will need to figure out how and what they can move into the cloud.

One good analogy is the power industry. In the old days, if you had a factory, you used the river or a steam engine to make your own power. Then came the national grid and firms didn't need to do that any longer. But some facilities - hospitals, for example - still have their own generators in case things go wrong. There will be a case for maintaining some in-house IT capacity.

MT: Well, saving money is certainly a good starting point these days. Are there other advantages to businesses being in the cloud?

AG: Companies are using the cloud in multiple ways to achieve high performance. For example, the cloud changes how organisations are able to communicate with their stakeholders. …

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